Table of Contents
Understanding the Need for Cycle-Time Reduction
In the 1950s C. N. Parkinson concluded that work expands to fill the time allotted. That observation summed up the approach of American business for decades. In the late 1980s a rapidly changing commercial environment put pressure on the structure of the marketplace. Parkinson's law could no longer be sanctioned. Time became the enemy. An organization's competitive position, not to mention survival, instead began to depend on compressing time, not expanding it.
Factors Influencing Materials Leadtime and the Total Cost Impact
There are any number of factors that influence materials leadtimes. These, in turn, have an influence on total cost. After all, time is money. For example, high asset turnover leads to a high return on investment, so a short leadtime not only brings rapid asset turnover, but results in lower cost. The materials leadtime is intrinsically related to the overall efficiency and effectiveness of the supply management system. Therefore, there is a potential to reduce material costs and improve a product's competitive advantage when the materials leadtime is reduced and leadtime reliability is improved.
The materials leadtime consists of many components that represent the activities or tasks to be performed. Developing a strategy to reduce leadtime length and improve reliability involves focusing on each component and its relationships with other components. These actions can be organized into a four-step approach typically used in a PERT/CPM method (see box on page 13).
CHAN K. HAHN, PH.D.
Dr. Chan K. Hahn is the NAPM Professor of Purchasing Management at Bowling Green State University in Ohio. Dr. Hahn has been instrumental in developing programs in purchasing, materials management, and production management at BGSU over the past 25 years. He has delivered speeches and made presentations in diverse settings, both academic and managerial, and has been a presenter at several NAPM Annual International Purchasing Conferences.
Dr. Hahn has published extensively in numerous purchasing journals. He received a B.S.B.A degree from Yonsei University in Seoul, Korea, and his M.B.A in marketing and Ph.D. in production management and purchasing management from Ohio State University.
THOMAS Y. CHOI, PH.D.
Dr. Thomas Y. Choi is an assistant professor of management at Bowling Green State University in Ohio, teaching and researching in supply chain management, continuous improvement, total quality management, and organizational change and development. He has published extensively and has been a presenter at several NAPM Annual International Purchasing Conferences.
Dr. Choi received his B.A. degree from the University of California at Berkeley and his Ph.D. from the University of Michigan.
- Hendrick, Thomas E., Ph.D. Purchasing's Contribution to Time-Based Strategies, Center for Advanced Purchasing Studies, 1994
- International Journal of Purchasing and Materials Management, Winter 1994, "Purchasing's Role in Product Development: The Case for Time-Based Strategies"
- NAPM Insights, February 1994, "Reaching Your Cycle Time Goals"
- NAPM Insights, February 1994, "Technology Takes a Bite Out of Cycle Time"
- NAPM Insights, February 1994, "Time Is Money"
- NAPM 79th Annual International Conference Proceedings, "Cut Supplier Lead Times By 50% - No Mirrors, No Kidding," National Association of Purchasing Management, April 1994
- NAPM 81st Annual International Conference Proceedings, "Cycle Time Reduction: A Procurement Perspective," National Association of Purchasing Management, April 1996
- NAPM 81st Annual International Conference Proceedings, "Positive Management Strategy for Materials Lead Time," National Association of Purchasing Management, April 1996
FOR FURTHER READING
- Brooks, Roger. Inventory Record Accuracy: Unleashing the Power of Cycle Counting, Oliver Wright Publications, 1993
- Hough, Harry E. Handbook of Buying and Purchasing Management, Prentice Hall, 1992
- Jones, John W. High Speed Management: Time-based Strategies for Managers and Organizations, Jossey-Bass, 1993
- International Journal of Purchasing and Materials Management, Summer 1996, "Purchasing's Involvement in Time-Based Strategies"
- Norman, Robert. Managing Inventory for Cost Reduction, Prentice Hall, 1992
- Phillip, Thomas. Getting Competitive - Middle Managers and the Cycle Time Ethic. McGraw-Hill, 1991
- Production and Inventory Management, vol. 22, no. 4, 1981, "Forecast Error Measurement at Manufacturing Lead Time"
- Production and Inventory Management, vol. 23, no. 3, 1982, "Toward Understanding Lead Time in MRP Systems"
- Stalk, George. Competing Against Time, Collier Macmillan, 1990
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